Alt fuels driving K-wave formation

December 11, 2017 by Denis Pombriant

Mary Barra, CEO, GM

Have you noticed how petroleum companies like Exxon-Mobile and Shell are talking about their research into alternate fuels or ways of using them that don’t cause pollution such as fuel cells? Those commercials are designed to make us feel good by reassuring us that something is being done to ward off the worst effects of global warming caused by CO2 building up in the atmosphere. But realistically they are also attempts to preserve a dying paradigm.

Consider this. If an oil company can figure out how to make organic (carbon-based) fuels it can preserve most of its refining and retailing operations though obviously some additional investments, it would be a home run for the companies. The solution would need changes in operations to actually grow algae, the current favorite microbe, for the photosynthetic part of the job. There would necessarily be a different refining process too but from there on liquid fuel is liquid fuel.

It’s actually not a hard problem and there are many labs working on the details right now because the science of organic chemistry has been around for nearly 200 years. What’s hard about the business of synthesizing organic fuels is the accounting. Not the dollars and cents accounting but the energy accounting.

For every chemical bond you make such as carbon to hydrogen there’s a required quantity of energy needed to store in the bond. This is how chemical energy works. Adding one Hydrogen atom to one Carbon atom will store about 103 kilo-calories per mole (a chemical unit of measure). Of course, in reality it takes even more energy to push the reaction forward and that energy is usually just lost to the environment as waste heat.

Very quickly you can see that it takes more energy to create those fuels than they represent. So the question becomes, where will all that energy come from? The only energy source big enough to do the job is the sun, which brings us back to algae. These primitive little green plants capture sunlight far more efficiently than we do and store it in their bodies without much effort. That’s what much of the synthetic fuel industry is about

But even once you’ve grown a bunch of algae in commercially useful amounts you’d still need to refine it into something that will burn in an internal combustion engine. The issue with that, as with most parts of the synfuel world, is that this processing costs even more in energy. Any chemist or physicist worth a Ph.D. and quite a few undergrad chemistry majors, can do the accounting and the verdict is that if you want to capture energy in large quantities, find other ways. Simply put the accounting on this approach doesn’t work. You spend more than you get.

That’s too bad too. It means that the fossil fuel infrastructure, which includes cars and trucks that run on some form of petroleum as well as the petroleum industry, will go the way of the passenger pigeon. That’s an investment of trillions of bucks. Stranded assets.

Last point, this makes no mention of the other great demand on fossil fuels as raw materials for making carbon based plastics, rubber, some glass, cement, synthetics like nylon, dyes and pharmaceuticals. They all have origins or major production contributions from fossil fuels. Given all that, why are we still burning the stuff?

The transportation market is already giving the organic chemistry approach a pass.

Carmakers have decided that batteries and electric motors are the future of ground based transportation and they are voting with their feet. It looks like 2018 might be the last year of internal combustion engine (ICE) supremacy in dealer showrooms. In 2019 a host of car companies including but not limited to Ford, GM, Honda, Nissan, Toyota, BMW, Volkswagen, Volvo, and even Aston Martin have announced they will introduce pure electric or hybrid electric cars.

Most of the specs I’ve seen represent cars that get 300 KM per charge (about 185 miles). That’s not as far as a tank of gas can take you but how often do you drive a full tank of gas in a day? Some people do. For them bigger batteries, faster charging, and charging stations in run of the mill parking lots and garages might fill in the gaps.

I am not worried. This is how market revolutions start. You deliver a product that’s good enough for a majority of situations and a large number of customers. Is it perfect? No, far from it. But it provides a workable baseline from which to grow. From this point, exponential growth can take off. This maps very closely with Christensen’s Innovator’s Dilemma.

That’s what we have and it’s why 2019 is so important. It’s also in line with K-wave economics, which I have been promoting for a while. By my calculations 2020 or there about should witness the start of a new K-wave organized around sustainability. Sustainable energy, food supplies, fresh water, jobs in emerging industries and a lot more will make up this age. The petroleum industry isn’t ending, at least not right away, but it is already receding into the background. We still need its products for all of the raw material things discussed above. But we don’t need to burn it, except as jet fuel, for now. When we stop adding to the problem it will make the clean up job much easier.